In its October issue, HFM, the magazine of the Healthcare Financial Management Association, published “The New Medicare DSH Payment: What’s Baked into the Pie—and How It’s Sliced” by Akin Gump health care partners Christopher Keough and Stephanie Webster.

The article notes that Medicare’s new method for calculating disproportionate share hospital (DSH) payments reduces these payments to all qualifying hospitals. Mandated by the Affordable Care Act, the new payment method may, however, reduce and redistribute these payments in unexpected ways.

In this article, the authors trace the development of the DSH payment and outline the impetus for the new method, then analyze the new payment’s components and mechanics, concluding that “Although some hospitals may see a benefit, at least in the near term, aggregate payments to all hospitals are being reduced, and those payment reductions may exceed expectations based on the intent of the ACA.”